Purpose adjusting entries

Assignment Help Financial Accounting

Reference no: EM139889

During its first month of operation, the Rawls Repair Corporation, which specializes in bicycle repairs, completed the following transactions:

Oct. 1	Began business by making a deposit in a company bank account of $12,000, in exchange for 1,200 shares of $10 par value common stock.
Oct. 1	Paid the premium on a one-year insurance policy, $1,200.
Oct. 1	Paid the current month's rent, $1,040.
Oct. 3	Purchased repair equipment from Conklin Company, $4,400. Paid $600 down and the balance were placed on account. Payments will be $200.00 per month for nineteen months. The first payment is due 11/1.
Oct. 8	Purchased repair supplies from McKenna Company on credit, $390.
Oct. 12	Paid utility bill for October, $154.
Oct. 16	Cash bicycle repair revenue for the first half of October, $1,362.
Oct. 19	Made payment to McKenna Company, $200.
Oct. 31	Cash bicycle repair revenue for the last half of October, $1,310.
Oct. 31	Declared and paid cash dividend of $800.

A. Prepare adjusting entries using the following information in the General Journal below. Show your calculations!

a) One month's insurance has expired.

b) The remaining inventory of repair supplies is $194.

c) The estimated depreciation on repair equipment is $70.

d) The estimated income taxes are $40.

B. Post the adjusting entries to the General Ledger T-accounts and compute adjusted balances.

Reference no: EM139889

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